Case: 20-11179 Document: 00515812996 Page: 1 Date Filed: 04/07/2021
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`No. 20-11179
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`IN THE UNITED STATES COURT OF APPEALS
`FOR THE FIFTH CIRCUIT
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`DATA MARKETING PARTNERSHIP, L.P., et al.,
`PLAINTIFFS-APPELLEES,
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`V.
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`UNITED STATES DEPARTMENT OF LABOR, et al.,
`DEFENDANTS-APPELLANTS.
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`ON APPEAL FROM A JUDGMENT OF THE UNITED STATES DISTRICT
`COURT FOR THE NORTHERN DISTRICT OF TEXAS
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`BRIEF OF THE DISTRICT OF COLUMBIA AND
`THE STATES OF CALIFORNIA, COLORADO, CONNECTICUT,
`DELAWARE, ILLINOIS, MAINE, MARYLAND, MASSACHUSETTS,
`MICHIGAN, MINNESOTA, NEVADA, NEW JERSEY, NEW MEXICO,
`NEW YORK, NORTH CAROLINA, PENNSYLVANIA, RHODE ISLAND,
`VERMONT, VIRGINIA, WASHINGTON, AND WISCONSIN
`AS AMICI CURIAE IN SUPPORT OF DEFENDANTS-APPELLANTS
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`KARL A. RACINE
`Attorney General for the District of Columbia
`
`
`LOREN L. ALIKHAN
`Solicitor General
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`CAROLINE S. VAN ZILE
`Principal Deputy Solicitor General
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`ASHWIN P. PHATAK
`Deputy Solicitor General
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`HARRISON M. STARK
`Assistant Attorney General
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`Office of the Attorney General
`400 6th Street, NW, Suite 8100
`Washington, D.C. 20001
`(202) 724-6609
`caroline.vanzile@dc.gov
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`

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`TABLE OF CONTENTS
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`INTRODUCTION AND STATEMENT OF INTEREST OF
`AMICI CURIAE ........................................................................................................ 1
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`SUMMARY OF ARGUMENT ................................................................................. 3
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`ARGUMENT ............................................................................................................. 6
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`I.
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`Questions Over ERISA’s Scope Are Foundationally Questions
`About State Versus Federal Authority .................................................. 6
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`A.
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`States have long regulated the business of insurance under
`their police power ........................................................................ 7
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`B. Where applicable, ERISA preempts state regulation ............... 11
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`II.
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`All Three Branches Of The Federal Government Have Worked
`To Ensure That ERISA Preserves States’ Historic Police Power
`Over Insurance .................................................................................... 13
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`III. The District Court’s Interpretation Trammels States’ Police
`Power By Expanding ERISA’s Scope And Aggrandizing Federal
`Authority ............................................................................................. 19
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`CONCLUSION ........................................................................................................ 22
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`TABLE OF AUTHORITIES
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`Cases
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`Brown v. Hotel & Rest. Emps. & Bartenders Int’l Union Loc. 54,
`468 U.S. 491 (1984) ............................................................................................ 14
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`Cal. Div. of Lab. Standards Enf’t v. Dillingham Constr., N.A., Inc.,
` 519 U.S. 316 (1997) ........................................................................................... 17
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`Cal. State Auto. Ass’n Inter-Ins. Bureau v. Maloney, 341 U.S. 105 (1951) .............. 8
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`Country-Wide Ins. Co. v. Harnett, 426 F. Supp. 1030 (S.D.N.Y.),
` aff’d, 431 U.S. 934 (1977) ................................................................................... 7
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`De Buono v. NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S. 806 (1997) .......... 17
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`Emps. of Dep’t of Pub. Health & Welfare v. Dep’t of Pub. Health & Welfare,
` 411 U.S. 279 (1973) ........................................................................................... 13
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`FMC Corp. v. Holliday, 498 U.S. 52 (1990) ........................................................... 15
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`Massachusetts v. Morash, 490 U.S. 107 (1989) ...................................................... 17
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`MDPhysicians & Assocs., Inc. v. State Bd. of Ins.,
` 957 F.2d 178 (5th Cir. 1992) ............................................................................. 20
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`Meredith v. Time Ins. Co., 980 F.2d 352 (5th Cir. 1993) ........................................ 20
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`N.Y. Life Ins. Co. v. Deer Lodge Cty., 231 U.S. 495 (1913)...................................... 9
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`N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co.,
`514 U.S. 645 (1995) ........................................................................... 3, 17, 18, 19
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`Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992) ..................................... 19
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`Noble State Bank v. Haskell, 219 U.S. 104 (1911) .................................................... 8
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`Paul v. Virginia, 75 U.S. 168 (1868) ......................................................................... 9
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`Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355 (2002)............................ 16, 17
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`Rutledge v. Pharm. Care Ass’n, 141 S. Ct. 474 (2020) ........................................... 17
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`Schwartz v. Gordon, 761 F.2d 864 (2d Cir. 1985) .................................................. 11
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`Sec. & Exch. Comm’n v. Variable Annuity Life Ins. Co. of Am.,
`359 U.S. 65 (1959) ................................................................................................ 7
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`United States v. Se. Underwriters Ass’n, 322 U.S. 533 (1944) ................................. 9
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`1851 N.H. Laws 1072 ................................................................................................ 8
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`Statutes and Regulations
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`29 C.F.R. § 2510.3-40 .............................................................................................. 18
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`29 U.S.C. § 1001 ...................................................................................................... 11
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`29 U.S.C. § 1002 ...................................................................................................... 19
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`29 U.S.C. § 1003 ...................................................................................................... 12
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`29 U.S.C. § 1144 .............................................................................................. passim
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`Pub. L. No. 97-473, 96 Stat. 2605 (1983) ................................................................ 16
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`Pub. L. No. 79-15, 59 Stat. 33 (1945) ...................................................................... 10
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`Executive and Legislative Materials
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`128 Cong. Rec. 30,356 (1982) ................................................................................. 16
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`DOL Op. No. 2020-01A (Jan. 24, 2020) ................................................................. 20
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`S. Rep. No. 93-127 (1974), as reprinted in 1974 U.S.C.C.A.N. 4838 .................... 11
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`U.S. Dep’t of Labor, MEWAs Multiple Employer Welfare Arrangements
`Under the Employee Retirement Income Security Act (ERISA): A Guide
`to Federal and State Regulation (Aug. 2013) .................................................... 18
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`U.S. Gov’t Accountability Off., GAO-04-312, Private Health Insurance:
`Employers and Individuals are Vulnerable to Unauthorized or Bogus
`Entities Selling Coverage (2004) ................................................................. 13, 15
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`Other Authorities
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`Christopher C. French, Dual Regulation of Insurance,
`64 Vill. L. Rev. 25 (2019) ..................................................................................... 8
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`Spencer L. Kimball & Barbara P. Heaney,
`Federalism and Insurance Regulation: Basic Source Materials (1995) .............. 8
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`Mila Kofman & Karen Pollitz, Health Insurance Regulation by States and the
`Federal Government: A Review of Current Approaches and Proposals for
`Change, J. of Ins. Reg., Summer 2006 ............................................................... 10
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`Nat’l Ass’n of Ins. Comm’rs, Health and Welfare Plans Under the Employee
`Retirement Income Security Act: Guidelines for State and Federal
`Regulation (2019) ........................................................................................ 15, 16
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`Nat’l Ass’n of Ins. Comm’rs & Ctr. for Ins. Pol’y Rsch.,
`State Insurance Regulation (2011) ....................................................................... 9
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`Nat’l Conf. of State Legs., Health Innovations State Law Database
`(Jan. 31, 2021)..................................................................................................... 10
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`the McCarran-Ferguson Act,
`Eric Nordman, The Relevance of
`CIPR Newsletter (Ctr. for Ins. Pol’y Rsch., Kansas City, Mo.), Aug. 2017 ...... 10
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`Christen Linke Young, USC-Brookings Schaeffer Initiative for Health Pol’y,
`Taking A Broader View of “Junk Insurance” (July 2020) ................................. 10
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`INTRODUCTION AND STATEMENT OF INTEREST OF AMICI CURIAE
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`In the judgment below, the district court ordered the Department of Labor to
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`treat Data Marketing Partnership’s benefits arrangement—whereby users obtain
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`health insurance in exchange for sharing data as they browse the Internet—as an
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`“employee benefit plan” under the Employee Retirement Income Security Act of
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`1974 (“ERISA”). As the Department of Labor’s brief explains, that conclusion does
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`not comport with either ERISA or the Administrative Procedure Act. The District
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`of Columbia and the states of California, Colorado, Connecticut, Delaware, Illinois,
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`Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New
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`Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Vermont,
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`Virginia, Washington, and Wisconsin submit this brief as amici curiae to emphasize
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`another deficiency in the district court’s analysis: it disregarded the significant
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`federalism issues presented by this case.1
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`Under ERISA’s preemption provision, bona fide self-insured single-employer
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`ERISA plans are immune from direct state insurance regulation. But as the text of
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`ERISA and decades of Supreme Court jurisprudence confirm, nothing in the statute
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`supplants states’ historic police power to regulate insurance more broadly by
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`1
`The Amici States submit this brief as expressly authorized by Federal Rule of
`Appellate Procedure 29(a)(2), which provides that “[t]he United States or its officer
`or agency or a state may file an amicus brief without the consent of the parties or
`leave of court.”
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`protecting residents from fraud, financial insolvency, and substandard insurance
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`coverage. Thus, ERISA-covered welfare plans that provide benefits through the
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`purchase of insurance remain subject to indirect regulation because the coverage
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`they provide remains fully subject to state law. The history of ERISA enforcement,
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`however, reveals a surfeit of schemes calculated to cloak the sale of health coverage
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`to employers and individuals in the costume of an ERISA plan in order to evade the
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`consumer protections of state insurance regulation. Congress, the Supreme Court,
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`and the U.S. Department of Labor have therefore approached questions about
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`ERISA’s preemptive reach carefully to ensure that ERISA’s provisions do not crowd
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`out states’ ability to faithfully enforce their historic police powers over insurance
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`regulation. And with good reason: ERISA’s requirements—which concern
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`fiduciary duties, disclosure requirements, and reporting standards—do not
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`substantively regulate insurance in all the ways necessary to protect the public. Our
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`dual system has given much of that role to the states.
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`Fundamentally, questions about ERISA’s preemptive scope are questions
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`about the allocation of power in a federal system. The Amici States therefore have
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`a critical interest in protecting their historic police powers to ensure the health and
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`well-being of their residents through insurance regulation. As explained in detail
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`below, by embracing the “uncritical literalism” that the Supreme Court has
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`repeatedly rejected, N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers
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`2
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`Ins. Co., 514 U.S. 645, 656 (1995), the district court radically expanded the
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`definitional scope of entities regulated by ERISA, unlawfully usurping states’
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`historic role over insurance regulation expressly preserved by ERISA’s insurance
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`saving clause. The district court’s judgment therefore effects a power shift from the
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`states to the federal government—over the federal government’s own objections.
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`This Court should reverse.
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`SUMMARY OF ARGUMENT
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`1. Foundationally, questions over ERISA’s definitional scope implicate the
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`proper allocation of power between the states and the federal government. As early
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`as the Founding era, insurance was considered a local concern, and insurance
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`regulation constituted a paradigmatic use of states’ historic police power. ERISA
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`did not disturb this landscape. As its name suggests, the Employee Retirement
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`Income Security Act is concerned with pension and welfare plan management in the
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`traditional employer-employee context, not with the regulation of insurance more
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`broadly. Congress did not grant the federal government the power to regulate the
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`marketing, solvency, and suitability of self-insured single-employer plans because
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`employer plan sponsor interests aligned with those of their employees and thus such
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`regulation, whether state or federal, would have been an unwanted and unnecessary
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`intrusion on the employment relationship. ERISA therefore contains few of the
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`substantive provisions concerning licensing requirements, rating restrictions, trade
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`practice standards, or solvency guarantees contained in state insurance regulation.
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`But to ensure that the Act properly protects pension plans and enables the efficient
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`administration of employee welfare plans, ERISA preempts “any and all State laws
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`insofar as they . . . relate to any employee benefit plan.” 29 U.S.C. § 1144(a). For
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`this reason, the question of what health coverage arrangements qualify as bona fide
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`ERISA “employee benefit plans” significantly affects the proper balance between
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`state and federal authority.
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`2. Precisely because ERISA’s preemption provision risks intruding into
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`sensitive areas of historic state regulation, all three branches of the federal
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`government have vigilantly policed the Act’s definitional boundaries to ensure that
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`ERISA’s scope remains properly cabined. First, Congress expressly codified this
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`intent in ERISA’s original language by including a saving clause to preserve state
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`insurance regulation, and later amended ERISA to clarify that states retain authority
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`over substantive insurance regulation for multiple employer welfare arrangements,
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`even when such entities are also ERISA-covered plans. Second, the Supreme Court
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`has set clear interpretive rules for construing ERISA, repeatedly reaffirming that
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`courts must read the Act against the sensitive backdrop of state oversight in this area.
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`Third, the Department of Labor has implemented ERISA to carefully limit the Act’s
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`regulatory scope and facilitate state regulation over insurance providers and markets.
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`Accordingly, all three branches of the federal government have repeatedly reached
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`the uncontroversial conclusion that ERISA was never intended to supplant states’
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`traditional role in regulating insurance and protecting consumers in settings where
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`health coverage was not offered as an incident of an authentic employment
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`relationship, but marketed to multiple employers or discrete individuals.
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`3. The district court ignored these well-settled principles of federalism.
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`Instead, it concluded that Data Marketing Partnership’s benefits arrangement—
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`whereby participants obtain health insurance in exchange for sharing data as they
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`browse the Internet—was an “employee benefit plan” under ERISA. That
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`conclusion eviscerates the careful limits that Congress, the Supreme Court, and the
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`Department of Labor have placed on ERISA by limiting its preemption to plans in
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`genuine employment contexts. In this case, there is no evidence that the limited
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`partners of Data Marketing Partnership are meaningfully employed or perform any
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`services on its behalf. The sole “service” that they perform is allowing the
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`installation of software to their personal electronic devices so that their personal data
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`can be tracked, mined, and sold to third parties. If unscrupulous insurance providers
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`could avoid state regulation simply by marketing insurance to individual “users”
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`who passively provide data through everyday use of personal devices, ERISA’s
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`carefully cabined limits would cease to exist and states would lose a significant
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`portion of their historic oversight authority over insurance markets.
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`5
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`I.
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`ARGUMENT
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`Questions Over ERISA’s Scope Are Foundationally Questions About
`State Versus Federal Authority.
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`Since the Nation’s earliest days, states have regulated the business of
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`insurance. This regulatory authority, a paradigmatic exercise of states’ historic
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`police power, is critical to protecting individuals and companies from catastrophic
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`financial loss.
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`ERISA is not nominally concerned with insurance regulation. But where
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`applicable, ERISA’s preemption provision shields certain entities from state
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`oversight even where they provide a form of insurance. Whether a particular
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`benefits arrangement falls under ERISA is therefore critically important: non-
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`ERISA plans are subject to the full suite of state regulation, while self-insured
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`ERISA plans generally are not.2 Thus, definitional questions about what qualifies
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`as an “ERISA plan” implicate fundamental issues of federalism and the division of
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`state versus federal authority.
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`2
`The exception, of course, is multiple employer welfare arrangements, or
`MEWAs, some of which qualify as ERISA plans but also remain subject to state
`insurance regulation. MEWAs’ unusual shared status is the direct result of
`Congressional amendments to ERISA, passed in the wake of widespread consumer
`harm facilitated by promoters claiming that MEWAs are immune from state
`insurance oversight. See infra, Section II.
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`6
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`A.
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`States have long regulated the business of insurance under their
`police power.
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`In our federal system, “the regulation of health and safety matters is primarily,
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`and historically, a matter of local concern.” Hillsborough County, Fla. v. Automated
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`Med. Labs., Inc., 471 U.S. 707, 719 (1985). Insurance is key to protecting health
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`and safety: it ensures the physical and economic well-being of citizens by
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`distributing risk and allowing individuals to structure their lives free from the danger
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`of catastrophic financial loss. As the Supreme Court has recognized, insurance itself
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`is “a concept which [takes] its coloration and meaning largely from state law, from
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`state practice, from state usage.” Sec. & Exch. Comm’n v. Variable Annuity Life Ins.
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`Co. of Am., 359 U.S. 65, 69 (1959).
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`Recognizing that insurance is, by definition, “an industry that is vested with
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`public interest,” Ronald W. Klein, A Regulator’s Guide to the Insurance Industry 1
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`(2d. ed 2005),3 courts have consistently held that its regulation is quintessentially “a
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`proper subject for the state’s exercise of its police power,” Country-Wide Ins. Co. v.
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`Harnett, 426 F. Supp. 1030, 1035 (S.D.N.Y.), aff’d, 431 U.S. 934 (1977). Indeed,
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`the Supreme Court has emphasized that insurance is “a business to which the
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`government has long had a ‘special relation’” and that what is traditionally “said
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`about the police power—that it ‘extends to all the great public needs’ and may be
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`Available at https://bit.ly/31AxjzQ.
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`3
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`7
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`utilized in aid of what the legislative judgment deems necessary to the public
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`welfare—is peculiarly apt when the business of insurance is involved.” Cal. State
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`Auto. Ass’n Inter-Ins. Bureau v. Maloney, 341 U.S. 105, 109 (1951) (quoting Noble
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`State Bank v. Haskell, 219 U.S. 104, 111 (1911)).
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`State regulation of insurance, accordingly, has a pedigree that precedes this
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`Nation’s creation.
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` Beginning with Benjamin Franklin’s “Philadelphia
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`Contributorship for Insuring Houses from Loss by Fire” in the mid-1700s, see
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`Christopher C. French, Dual Regulation of Insurance, 64 Vill. L. Rev. 25, 37 (2019),
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`and extending to New Hampshire’s first formal agency dedicated to insurance
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`regulation formed in 1851, see 1851 N.H. Laws 1072 (establishing a “board of
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`insurance commissioners” authorized “to make personally a full examination into
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`the condition of each [insurance] company and the management of its affairs”),
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`insurance regulation has long had a local dimension. See generally Spencer L.
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`Kimball & Barbara P. Heaney, Federalism and Insurance Regulation: Basic Source
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`Materials 7 (1995) (describing the history of state insurance regulation). That local
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`oversight of insurance makes good sense. Although regulators broadly share the
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`same goals—ensuring that “solvent insurers . . . are financially able to make good
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`on the promises they have made” and that providers “treat policyholders and
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`claimants fairly,” Nat’l Ass’n of Ins. Comm’rs & Ctr. for Ins. Pol’y Rsch., State
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`8
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`Insurance Regulation 2 (2011)4—the mechanics of risk allocation and loss
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`prevention are necessarily context-specific. States are often best positioned to
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`ensure that insurance markets are accessible to the public, responsive to local social
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`and economic conditions, and include adequate protections for a local polity’s
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`particular needs.
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`Even amidst the growing complexity of insurance markets and the national
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`implications of insurance policy, Congress has taken extraordinary steps to ensure
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`that states retain their historic power over insurance regulation. In 1944, the
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`Supreme Court ruled that insurance constituted interstate commerce subject to
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`Congress’s Article 1 authority, United States v. Se. Underwriters Ass’n, 322 U.S.
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`533, 552-53 (1944), overruling a body of precedent deeming insurance a purely local
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`matter beyond the reach of federal regulation, see, e.g., N.Y. Life Ins. Co. v. Deer
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`Lodge Cty., 231 U.S. 495, 502-12 (1913); Paul v. Virginia, 75 U.S. 168, 182-85
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`(1868). In response to the Court’s ruling, Congress took unprecedented action: it
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`returned that power to the states. The McCarran-Ferguson Act of 1945 declared, as
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`a matter of national policy, that the “continued regulation and taxation by the several
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`States of the business of insurance is in the public interest,” and codified, as a rule
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`of statutory interpretation, that “silence on the part of the Congress shall not be
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`4
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`Available at https://bit.ly/3rGosHn.
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`9
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`construed to impose any barrier to the regulation or taxation of such business by the
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`several States.” Pub. L. No. 79-15, 59 Stat. 33 (codified at 15 U.S.C. § 1011).
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`As the experience of regulators and the Amici States makes clear, “[t]he
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`McCarran‐Ferguson Act is as relevant today as it was when it was adopted.” Eric
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`Nordman, The Relevance of the McCarran-Ferguson Act, CIPR Newsletter (Ctr. for
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`Ins. Pol’y Rsch., Kansas City, Mo.), Aug. 2017, at 13. States continue to regulate
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`insurance because the damage risked by fraudulent or unstable insurance is
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`catastrophic—particularly in the area of health insurance. See Christen Linke
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`Young, USC-Brookings Schaeffer Initiative for Health Pol’y, Taking A Broader
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`View of “Junk Insurance” (July 2020).5 Indeed, states presently rely on an array of
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`tools to protect the public from fraudulent or insolvent health insurance, including
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`licensing requirements, form and rate filing policies, market conduct examinations,
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`corrective actions, and, if necessary, enforcement proceedings. See Mila Kofman &
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`Karen Pollitz, Health Insurance Regulation by States and the Federal Government:
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`A Review of Current Approaches and Proposals for Change, J. of Ins. Reg., Summer
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`2006, at 77, 86-89; Nat’l Conf. of State Legs., Health Innovations State Law
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`Database (Jan. 31, 2021) (providing a searchable database of recently enacted state
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`health legislation, including insurance regulation addressing network adequacy,
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`5
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`Available at https://brook.gs/3m5pjQU.
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`10
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`price transparency, and payment reforms).6 These regulatory protections are core
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`exercises of states’ historic police power.
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`B. Where applicable, ERISA preempts state regulation.
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`As its name suggests, the Employee Retirement Income Security Act does not
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`regulate insurance. Instead, Congress passed ERISA to “remedy the abuses that
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`existed in the handling and management of welfare and pension plan assets that
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`constitute part of the fringe and retirement benefits held in trust for workers in
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`traditional employer-employee relationships.” Schwartz v. Gordon, 761 F.2d 864,
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`868 (2d Cir. 1985) (citing S. Rep. No. 93-127, at 3-5 (1974), as reprinted in 1974
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`U.S.C.C.A.N. 4838, 4839-42); see Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134,
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`140 n.8 (1985) (“[T]he crucible of congressional concern was misuse and
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`mismanagement of plan assets by plan administrators and . . . ERISA was designed
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`to prevent these abuses in the future.”). By its own terms, the Act guarantees “the
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`continued well-being and security of millions of employees and their dependents,”
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`29 U.S.C. § 1001(a), by “requiring the disclosure and reporting to participants . . . of
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`financial and other information” related to welfare and pension plans, according to
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`specific fiduciary standards, id. § 1001(b). The Act contains few of the substantive
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`provisions covered by state insurance regulation.
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`6
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`Available at https://bit.ly/2Pt0z9x.
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`11
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`Section 1003 defines ERISA’s scope. That section provides that the statute
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`shall apply to “employee benefit plan[s]” that are “established or maintained” by an
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`“employer” or “employee organization” “engaged in commerce or in any industry
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`or activity affecting commerce.” Id. § 1003(a). ERISA also contains a preemption
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`clause: the Act “supersede[s] any and all State laws insofar as they . . . relate to any
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`employee benefit plan.” Id. § 1144(a). In other words, state insurance regulations—
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`subject to the exceptions below—do not reach bona fide employee benefit plans
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`subject to ERISA. Removing self-funded plans from state insurance regulation
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`makes sense because these plans pose little risk to the general public: health plans
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`offered in genuine employer-employee relationships—the quintessential ERISA
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`“employee benefit plan”—are provided as tangential benefits to workers, not
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`“marketed” to consumers like traditional insurance products. Congress did not grant
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`the federal government the power to regulate the marketing, solvency, and suitability
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`of self-insured single-employer plans because employer plan sponsor interests
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`aligned with those of their employees and thus such regulation, whether state or
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`federal, would have been an unwanted and unnecessary intrusion on the employment
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`relationship.
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`Given this preemption clause, however, and the relative freedom that self-
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`funded employee benefit plans enjoy from state insurance oversight, including
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`detailed licensing, solvency, and consumer protection laws, the question of what
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`health coverage arrangements qualify as bona fide ERISA “employee benefit plans”
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`is critical to determining the bounds of state and federal regulation. Finding that
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`ERISA applies dispositively shields a self-insured arrangement from states’ historic
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`police power over insurance regulation. For entities interested in exploiting gaps in
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`oversight of insurance products, ERISA’s preemption provision thereby offers an
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`opportunity to invoke “employee benefit plan” status to “g[i]ve an appearance of
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`being exempt from state insurance regulation when they should [be] subject to
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`regulation.” U.S. Gov’t Accountability Off., GAO-04-312, Private Health
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`Insurance: Employers and Individuals are Vulnerable to Unauthorized or Bogus
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`Entities Selling Coverage 4 (2004).7
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`In short, ERISA’s preemption provision represents a careful balance: the Act
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`exempts bona fide ERISA employer health plans in the employment context from
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`state regulation to achieve ERISA’s objectives, while ensuring that insurance
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`marketers are still subject to critical state oversight.
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`II. All Three Branches Of The Federal Government Have Worked To
`Ensure That ERISA Preserves States’ Historic Police Power Over
`Insurance.
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`Conflicts between federal and state authority are inevitable; they contribute to
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`“the tension inherent in our system of federalism.” Emps. of Dep’t of Pub. Health
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`& Welfare v. Dep’t of Pub. Health & Welfare, 411 U.S. 279, 298 (1973) (Marshall,
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`7
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`Available at https://bit.ly/3rLjXLV.
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`J., concurring). Understandably, the differing priorities of the state and federal
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`governments sometimes result in diverging regulatory schemes and conflicting
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`objectives. Even when Congress chooses not to invoke the Supremacy Clause to
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`impose national uniformity in a particular area of law, see Brown v. Hotel & Rest.
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`Emps. & Bartenders Int’l Union Loc. 54, 468 U.S. 491, 500-01 (1984), states and
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`the federal government may have divergent visions of where regulatory authority
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`should be vested.
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`Not here. On the issue of insurance regulation, the federal system has spoken
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`with one clear voice: ERISA intended to preserve states’ historic police powers. In
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`overseeing ERISA’s implementation, all three branches of the federal government
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`have diligently policed the Act’s preemption provision to ensure that states retain
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`their traditional authority.
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`First, Congress has made clear that ERISA was not intended to supersede state
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`authority over insurance regulation. The clearest indication is in ERISA’s text:
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`immediately following the preemption clause, the Act states that “nothing in this
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`subchapter shall be construed to exempt or relieve any person from any law of any
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`State which regulates insurance, banking, or securities.” 29 U.S.C. § 1144(b)(2)(A).
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`As the plain meaning of this “saving clause” reflects, the provision “retains the
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`independent effect of protecting state insurance regulation of insurance contracts
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`purchased by employee benefit plans.” FMC Corp. v. Holliday, 498 U.S. 52, 64
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`(1990). ERISA also contains a so-called “equal dignity” clause preserving the
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`McCarran-Ferguson Act’s earlier reach, expressly providing that “[n]othing in this
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`subchapter shall be construed to alter, amend, modify, invalidate, impair, or
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`supersede any law of the United States . . . or any rule or regulation issued under any
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`such law.” 29 U.S.C. § 1144(d); see Nat’l Ass’n of Ins. Comm’rs, Health and
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`Welfare Plans Under the Employee Retirement Income Security Act: Guidelines for
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`State and Federal Regulation 11 (2019) (describing the “equal dignity” clause).
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`This plain language of ERISA confirms Congress’s desire to preserve states’ historic
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`authority over insurance regulation.
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`Congress has reaffirmed its intent to preserve state authority through
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`subsequent amendments. Shortly after ERISA